By Luciana Magalhaes
SAO PAULO, Feb 12 (Reuters) - Shares of Brazilian software company Totvs SA TOTS3.SA gained in early trading on Thursday, a day after the company reported fourth-quarter results and announced its largest ever share buyback program.
The firm late Wednesday posted net revenue of 1.5 billion reais ($290.68 million) in the fourth quarter, a 16% year-over-year increase, bringing full-year 2025 revenues to more than 5.7 billion reais, up 17% from the previous year. Adjusted net income surged 26% to 900 million reais for the year.
Alongside the earnings release, Totvs unveiled a new share buyback program authorizing the repurchase of up to 20 million shares through February 12, 2027.
"We have never announced a program of this magnitude, which means we are giving a direct response to what we view as an unjustified drop in the share price," said Totvs Chief Executive Officer Dennis Herszkowicz.
The company's shares opened about 2% higher on Thursday before losing momentum. They were down around 1.4% at midday, underperforming Brazil’s benchmark Bovespa index .BVSP, which slipped 0.08%. Totvs shares are down nearly 8% so far this year.
Herszkowicz told Reuters that the company's results reflect what investors can expect going forward. Totvs has historically maintained stable recurring revenues, with a customer retention rate of nearly 99% each quarter.
Therefore, he added, past performance serves as a reliable indicator of future performance. "It is like I am constantly building, brick by brick."
Totvs has also announced the launch of LYNN, Brazil's first business-to-business artificial intelligence foundation, which will increase the company's ability to develop highly specialized AI agents, the firm said in a statement.
Herszkowicz added that Totvs expects to continue its mergers and acquisitions strategy in 2026.
In mid-2025, the company agreed to buy StoneCo's Linx unit for 3.05 billion reais, a move aimed at strengthening its position in the retail segment.
"M&As are in our DNA,” Herszkowicz said.
($1 = 5.1604 reais)
(Reporting by Luciana Magalhaes; Editing by Chizu Nomiyama )
((Luciana.NovaesMagalhaes@thomsonreuters.com;))